September 14, 2018 / 7:21 PM / 2 months ago

Network International's owners pick banks for float: sources

LONDON/NEW YORK/DUBAI (Reuters) - The owners of Network International are working with investment banks Evercore (EVR.N) and Citi (C.N) on an initial public offering (IPO) of the largest payment processing firm across the Middle East and Africa, sources familiar with the matter said.

The Dubai-based company is jointly owned by Dubai’s largest bank Emirates NBD ENBD.DU and private equity firms Warburg Pincus and General Atlantic. The shareholders and advisors working on the deal declined to comment.

One of the sources said the IPO would be a dual listing in London and Dubai or a single listing in either location but that a decision on the listing venue has not been made.

The source said the IPO was likely to take place in the second quarter of 2019 before the summer.

The sources declined to comment on the company’s valuation or financials, which are not disclosed, or the timing of the listing.

Africa and the Middle East have the world’s fastest growing populations with an emerging middle class and a large youth population.

Payments processing assets have been highly sought-after in recent years as consumers worldwide switch to digital from cash, commanding impressive valuations and often achieving high returns for investors.

In June, payments processor Adyen (ADYEN.AS), which handles the payments backend for Netflix, Facebook and eBay, doubled in its market debut prompting criticism that bankers under-priced the stock.

According to Thomson Reuters data, Adyen is now trading at a next 12 months enterprise value to earnings before interest, tax, depreciation and amortization (EBITDA) multiple of 86 times while its peers trade at around 16 times.

Network International was established as a subsidiary of NBD in 1994. Middle East focused private equity firm Abraaj acquired a 49 percent stake in 2011.

Network International has grown its revenue outside its United Arab Emirates base in the wider Africa and Middle East region since Warburg Pincus and General Atlantic bought a 49 percent stake in 2015.

The acquisition of rival Emerging Markets Payments (EMP) helped accelerate that process as EMP had a large footprint in Africa.

At the time of Warburg Pincus and General Atlantic taking a stake in Network International, an executive at Warburg Pincus told Reuters an IPO of the firm was a possibility within five to seven years.

Network International services more than 70,000 merchant partners and 200 financial institutions across 55 countries, according to its website.

Additional reporting by Hadeel Al Sayegh in Dubai; Editing by Keith Weir and Edmund Blair

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